I Owe Debt to a Family Member. Can I Pay that Person Off Prior to Filing Missouri Bankruptcy?

Unfortunately, paying off a debt owed to a friend or family member prior to the filing of
a bankruptcy can result in a costly and difficult situation for both the person paid and yourself. Under the Missouri Bankruptcy Code, any payments to a friend or family member made within a year prior to the filing of bankruptcy can be voided by the Court.

The concept is based on a principal of fairness for all creditors, including those that you
are related to or familiar with. When the payment is voided by the Missouri Bankruptcy Court, the individual you paid could be ordered to pay the money back to the court or you could be required to pay the money in order to receive a discharge.

Many individuals believe that if there is no record of the payment, it does not need to be
disclosed. This is patently false and can result in a dismissal of your bankruptcy and possible criminal penalties. If you are considering filing Missouri bankruptcy and you have paid a debt to a friend or relative within the last year, disclose this fact to your attorney. If planned properly, the issue can be avoided and you can still pay the friend or relative after your case has been filed.

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